By Max Smetannikov

June 24, 2003

As Internet telephony gains acceptance in the enterprise, and voice over Wi-Fi is deployed in corporations across the U.S., equipment manufacturers and consultants are salivating at the prospect of additional sales, but large ISPs and wireless carriers lack enthusiasm.

Voice over packet, transmitted over Wi-Fi LANs, is gaining momentum as large retail chains like Lowe’s have converted some stores entirely to wireless IP voice. Eqiuipment vendors hope the Wi-Fi standard will be a new kind of wireless telephony — and a new revenue stream.

Vendors like SpectraLink and Airespace believe enterprise customers will want to convert their existing Wi-Fi setups to support voice as new telephone handsets become prevalent and cheaper, and enterprise customers learn about the cost savings the technology can provide.

Indeed, enterprise customers who take office to office and interoffice telephony in house in effect stop paying for those phone calls. With the right setup, calls made to other companies equipped with IP phones also in effect become free, charged as computer to computer connections. Experts say that because the FCC considers VoIP to be an unregulated technology companies shouldn’t worry about running afoul of the law when developing such setups.”VoIP is legal and would be so if a Wi-Fi device is used,” said Farooq Hussain, general partner at Network Conceptions, a telecom research and consulting firm.

Vendors making the solutions warn that not every Wi-Fi hotspot will support voice automatically. For voice calls to travel across radio frequencies, the Wi-Fi equipment has to support certain quality of service characteristics important to VoIP telephony, such as jitter control and bandwidth partitioning.

“Lots of data on the networks and other voice packets can cause delays that would disrupt telephone conversation quality,” said Ben Guderian, SpectraLink director of marketing.

Such interference can be caused either by many different users piling onto the same node, or by some users acting as bandwidth hogs. In home Wi-Fi networks kinds downloading DVD movies over the Internet could disrupt Internet access for the rest of the family, Guderian said.

The solution is in the latest Wi-Fi standard that puts key QoS characteristics onto the Wi-Fi boxes, called 802.11e. The “e” standard, as it is known in the industry, answers to some of the concerns that Wi-Fi vendors have when end users start considering VoIP over Wi-Fi setups. However, as it is common with IETF-related processes, the standard is behind schedule and most vendors with a business interest in seeing VoIP run over Wi-Fi tweak their systems to support parameters that would make introducing voice to Wi-Fi setups seamless.

“Even a wizard cannot predict the final ratification date [of 802.11e],” said Jeff Aaron, Airespace senior manager of product marketing. “There are systems out there that dramatically reduce network latency, with guarantees of less than 150 milliseconds of delay between client devices and the network this performance allows you to create enterprise networks that easily support the addition of voice applications.”

Other vendors have developed their own versions of 802.11e drafts submitted to IETF, which they then used to interoperate their VoIP over Wi-Fi systems with leading makers of Wi-Fi equipment. As a result, even as the standard is evolving slowly, customers can deploy voice over Wi-Fi.

“We interoperate with Cisco, Proxim and Symbol, which have most of the enterprise Wi-Fi market divided up between them,” said Guderian.

SpectraLink’s deployment at Lowe’s could be a prototype of things to come. Instead of regular stationary phones or mobile phones Lowe’s employees now carry SpectraLink Wi-Fi phones. Slightly bigger than large mobile handsets, and less clunky than most consumer wireless phones, SpectraLink phones pack all of the functions typically found in a business phone, from three way calling to multi-line selector to call forwarding. Taking into account Lowe’s specific working conditions (not much carpet, lots of high hard to reach shelves) SpectraLink made sure their handsets would be operational even after dropped 24 feet onto concrete.

More importantly, SpectraLink phones are dual mode: VoIP and regular telephone. All calls inside the store are made over Wi-Fi, but all calls made to customer and partner locations are made over the regular POTS system.

It seems likely that Lowe’s will soon add the Internet to its phone system. To get an outside line Lowe’s employees dial 9 today. The company could tweak existing gear to dial 8 to get into a network that would route the call over the Internet. If they are calling a different Lowe’s store that has the right equipment, or a vendor, the calls would realize the cost savings of Internet telephony.

SpectraLink is definitely not he only vendor evaluating this niche. Cisco rolled out its own VoIP over Wi-Fi handset in the spring, aiming at traditional business customers; and Motorola unveiled a mobile phone that supports Wi-Fi in the summer.

It is not clear whether or not service providers and the public will accept this technology–service providers may be tempted to fight it. So far wireless carriers like T-Mobile and AT&T Wireless seem to be trying to understand how to make money from Wi-Fi voice.

“I guess the reason T-Mobile and AT&T Wireless are bundling their cell phone and Wi-Fi services is that they hate the fact that it is very hard for them to make money from the hot spots,” said Hussain. “And there’s obviously a concern about license exempt spectrum being used for voice applications when mobile operators have shelled out fortunes to launch next generation service networks.”